The Dubai International Financial Centre (DIFC) stands as a premier financial hub spanning the Middle East, Africa, and South Asia (MEASA) region, ranking among the top 10 global financial centers. Hosting over 5,000 active registered firms and approximately 40,000 professionals, it fosters a thriving business ecosystem. With nearly two decades of operation, DIFC emerged as an independent judicial system, a global financial exchange, with distinctive architecture, and comprehensive support services. Within MEASA, a region comprising nearly three billion people and a nominal GDP of around USD 8 trillion, DIFC has played a pivotal role in facilitating investment and trade flows.
In this landscape of wealth management and asset protection, individuals and families seek robust structures offering financial security, privacy, and adaptability. The DIFC Foundation regime emerges as a compelling solution, providing an array of advantages for those reducing the complexities of wealth preservation. The secure, private, and flexible structures of family wealth management combined with the benefits of the DIFC jurisdiction, position it as a strategic choice in the realm of family wealth management.
What are the benefits of setting up a Foundation in the DIFC, Dubai?
Asset Protection:
One of the primary advantages of establishing a Foundation within the DIFC lies in asset protection. In conventional structures, personal assets may be vulnerable to claims from governments, creditors, or family members. However, the DIFC Foundation ensures a clear separation between the Founder and the Foundation’s assets, shielding them from external threats.
Privacy:
Maintaining privacy in financial matters is paramount, and the DIFC Foundation excels in this aspect. The names of Founders and Beneficiaries remain confidential, avoiding disclosure on official documents such as land registries and company registers. This discretion minimizes the risk of unwarranted claims from third parties.
Tax Planning:
In an era of globalized wealth, families with assets spanning multiple jurisdictions face intricate tax implications. The DIFC Foundation facilitates effective tax planning, providing a structured framework for the smooth transfer of generational wealth while minimizing exposure to taxes and inheritance levies.
Succession Planning:
The DIFC Foundation offers a secure avenue for Founder’s preferences in succession planning. Founders can stipulate their desires for the distribution of assets and related benefits after their demise, ensuring that their legacy aligns with their wishes and the foundation’s conditions.
Specific Advantages of setting up a Foundation in the DIFC:
- Legal Autonomy:
The DIFC operates as a financial free zone, boasting its civil and commercial laws. The DIFC Courts, conducting proceedings in English under the familiarity of Common Law, contribute to a legal environment that empowers Foundations with legal autonomy.
2. Asset Diversity:
The Foundation’s assets can encompass a wide array, including shares, bank accounts, aviation assets, and any other legally permissible assets worldwide. This diversity allows for a tailored approach to wealth management.
3. Legal Personality:
DIFC Foundations possess a distinct legal personality, granting them the flexibility to enter into contracts and arrangements independently. This feature aligns them with other incorporated entities, enhancing their legal standing.
4. Re-domiciliation:
Foundations can be redomiciled (migrated) in and out of the DIFC, providing a level of adaptability that is crucial in responding to changing circumstances, regulatory shifts, or family dynamics.
5. Governance Flexibility:
The DIFC Foundation allows for amendments to governance structures post-establishment. This flexibility ensures that the Foundation can evolve in tandem with the family’s changing needs or external regulatory changes.
6. Low Initial Commitment:
Foundations can be initiated with a commitment of assets as minimal as US$ 100, making this wealth management solution accessible to a broad spectrum of individuals and families.
7. No Physical Office Requirement:
Dispelling the need for a physical office, Foundations can leverage the address of a company service provider in the DIFC, reducing operational burdens.
8. Global Presence:
There is no obligation for the Founder or Foundation officers to be based in the UAE, allowing for seamless management from any location globally.
9. Corporate Roles:
All Foundation roles can be assumed by individuals or body corporates, providing a versatile approach to structuring.
10. Limited Public Disclosure:
The DIFC public register maintains a high level of confidentiality, omitting individuals’ names from public scrutiny.
11. Minimal Reporting Requirements:
With no mandate for annual returns, accounts, or audits, the DIFC Foundation simplifies administrative processes, ensuring a focus on wealth preservation.
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